The Practical CIO: A Common Sense Guide for Successful IT Leadership

Chapter 6. Manage Contracts, Don't Just Sign Them

Executive Summary

Negotiating a good contract can be a burdensome chore. But managing a contract is where the real works starts. Just because you have a signed contract with a service provider does not mean that you can put your feet up on your desk and relax. Business conditions can change, rendering some conditions in the contract meaningless. A shift in business strategy might require you to seek new terms. Nothing is chiseled into stone, no matter what the lawyers tell you. Most of all, a contract does not guarantee performance. It is your job to make sure the provider delivers.

The Seed Crystal

Always remember: The quality of your relationship with a supplier is shaped and defined by the contract that you and the supplier sign. So obviously you want to have comprehensive, well-written contracts with all of your suppliers.

If you work at a large company, you will have plenty of resources within the company supporting your efforts to negotiate good contracts. You will have help from legal, purchasing, finance, and other departments.

But in the final analysis, the contracts you sign are a reflection of your personality. If you are tough, honest, and fair, you will negotiate contracts that are tough, honest, and fair. If you are weak, disingenuous, and trying to create an unfair advantage, the contracts you negotiate will come back to haunt you and your organization for a long, long time.

A True Story

When I was hired as the CIO of General ...